{"id":176531,"date":"2022-10-07T00:32:18","date_gmt":"2022-10-06T23:32:18","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=176531"},"modified":"2026-06-09T02:19:40","modified_gmt":"2026-06-09T01:19:40","slug":"consumer-credit-act-2006","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/disputes-litigation\/consumer-credit-act-2006\/","title":{"rendered":"What is the Consumer Credit Act 2006 in England?"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">As a business operating in England, you should familiarise yourself with some aspects of the <em>Consumer Credit Act 1974<\/em> (\u2018CCA 1974\u2018) and its significant amendments made by the Consumer Credit Act 2006 (&#8216;CCA 2006&#8217;). The 1974 Act established the original framework for consumer credit regulation, while the 2006 Act introduced major reforms to modernise consumer protection and align with EU legislation. It deals with the rules around how businesses can <a href=\"https:\/\/legalvision.co.uk\/commercial-contracts\/consumer-rights-act\/\">lend money to consumers<\/a>, i.e. individuals. As a result, it is relevant if your business deals with lending money to people not acting in a business capacity. This article will outline what the CCA is, what the Act covers, and the critical points you should keep in mind if you intend to lend money to consumers.<\/p>\n\n\n    <div class=\"my-7 lg:my-10 border-y-2 border-gray-100 py-7 lg:py-10 flex flex-col sm:flex-row items-start gap-10\">\n                    <img decoding=\"async\" class=\"w-52 mx-auto my-0! rounded\" src=\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/4\/2023\/09\/27074704\/guide-to-resolve-uk-image-1.jpg\" alt=\"Front page of publication\"\n                 loading=\"lazy\" width=\"208\" height=\"298\">\n                <section>\n            <div class=\"text-2xl font-bold\">Guide to Resolving UK Business Disputes<\/div>\n            <div class=\"body-text\">\n                <p>This guide outlines how to resolve commercial disputes.<\/p>\n            <\/div>\n            \n\n<a href=\"https:\/\/go.legalvision.com.au\/guide-resolving-uk-business-disputes.html\" class=\" block px-5 py-3.5 max-w-fit bg-orange button__hover transition rounded text-white font-bold text-lg no-underline uppercase leading-tight text-center\" target=\"\" rel=\"\">Download Now<\/a>        <\/section>\n    <\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\">What is the CCA?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The CCA 2006 introduces modernised rules ensuring <a href=\"https:\/\/legalvision.co.uk\/regulatory-compliance\/consumer-law-rights-affect-your-business-in-the-uk\/\">consumer protection<\/a> in retail lending and credit. As a result, it is relevant if you are either seeking to lend money to consumers, or seeking to obtain credit in a non-business capacity.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The CCA covers many different types of debt and credit, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>hire purchase agreements;<\/li>\n\n\n\n<li>credit cards;<\/li>\n\n\n\n<li>personal loans; and<\/li>\n\n\n\n<li>buy now, pay later agreements<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">It does not cover agreements that it refers to as &#8216;unregulated debts&#8217;. This includes certain types of:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/legalvision.co.uk\/disputes-litigation\/my-business-cannot-pay-its-debts-what-are-my-options\/\">business debts<\/a>;&nbsp;<\/li>\n\n\n\n<li>mortgages;&nbsp;<\/li>\n\n\n\n<li>household utility bills; and&nbsp;<\/li>\n\n\n\n<li>debts towards a council (for example, council tax).<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The Act also requires the <a href=\"https:\/\/www.fca.org.uk\/\">Financial Conduct Authority<\/a> (&#8216;FCA&#8217;) to license certain types of lenders. Without proper licensing, a lender cannot reach a regulated agreement with the borrower. Furthermore, this will come with several negative legal implications for the lender. As a result, if you are considering lending as part of your business practice, you must understand your regulatory obligations before starting your business.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Key Changes Introduced by the Consumer Credit Act 2006<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The <em>Consumer Credit Act 2006<\/em> made several significant amendments to the original 1974 Act, modernising consumer credit regulation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The most significant change was the complete removal of the \u00a325,000 upper limit for regulated consumer credit agreements. Previously, only credit agreements up to \u00a325,000 were regulated under the <em>Consumer Credit Act<\/em>. From April 2008, all consumer credit agreements became potentially regulated regardless of amount. However, new exemptions from regulation were introduced including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Loans over \u00a325,000 that are predominantly for business purposes<\/li>\n\n\n\n<li>Loans to partnerships of four or more people<\/li>\n\n\n\n<li>Loans to &#8220;high net worth&#8221; individuals who agree to forgo consumer protection<br><\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The 2006 Act replaced the narrow &#8220;extortionate credit bargain&#8221; provisions with a much broader &#8220;unfair relationships&#8221; test. This change lowered the threshold for consumers to challenge unfair credit arrangements and allows courts to examine the entire relationship between creditor and debtor, not just original agreement terms. The focus shifted from price to the creditor&#8217;s conduct throughout the relationship.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The reforms strengthened various consumer rights, including improved pre-contractual information requirements and clearer procedures for early settlement and withdrawal from agreements. They represented a fundamental shift toward more comprehensive consumer protection while maintaining appropriate exemptions for genuine business lending and high-value transactions.<br><\/p>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n                            Call <a href=\"tel:+448081968584\" class=\"not-prose\">0808 196 8584<\/a> for urgent assistance.\n                <br>\n                Otherwise, complete this form, and we will contact you within one business day.\n                    <\/span>\n    <\/div>\n\n    \n\n<div 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The information that must be made available includes:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>how long the agreement will be for;<\/li>\n\n\n\n<li>the identity and the address of the credit provider;<\/li>\n\n\n\n<li>the total amount to pay back;<\/li>\n\n\n\n<li>the credit limit;<\/li>\n\n\n\n<li>the APR and interest rate related points; and<\/li>\n\n\n\n<li>the type of credit given.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">The Right to Withdraw from a Credit Agreement<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The CCA gives consumers the right to withdraw from a credit agreement within 14 days of receiving a copy of the terms of the agreement. However, suppose a consumer decides to cancel the agreement. In that case, they must pay back any money they have received, alongside any interest accumulated up to the cancellation of the agreement.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This rule does not apply to secured loans where the security is on a piece of land, and also on credit agreements where the amount is more significant than \u00a360,260.&nbsp;<\/p>\n\n\n\n<div  class=\"box box--icon box--star\">\n    <p>A consumer borrower may decide to pay back the loan early. In this case, the CCA states that the borrower will not have to pay back the entire interest amount per the original terms of the credit agreement. Instead, the consumer may pay back a statutory interest rebate.<\/p>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\">Furthermore, the consumer will have to write to the lender stating that they want to clear the debt. The lender will have seven days to get back with a settlement figure. The settlement figure will be the amount owed (plus interest) minus the statutory interest rebate.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The Right to See Credit Files<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A consumer borrower will also have the power to see their credit files, as held by a credit reference agency.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Further, a credit file will outline an individual&#8217;s credit history. Indeed, that individual can request amendments (if there is wrong information within the file), which the credit reference agency must consider within 28 days.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Finally, a consumer borrower can bring any issues to a financial ombudsperson service. Although most borrowers will first go to the creditor to discuss any issues, an ombudsman scheme can help resolve more complex problems.<\/p>\n\n\n    <div class=\"my-7 lg:my-10 border-y-2 border-gray-100 py-7 lg:py-10 flex flex-col sm:flex-row items-start gap-10\">\n                    <img decoding=\"async\" class=\"w-52 mx-auto my-0! rounded\" src=\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/4\/2023\/09\/27074704\/guide-to-resolve-uk-image-1.jpg\" alt=\"Front page of publication\"\n                 loading=\"lazy\" width=\"208\" height=\"298\">\n                <section>\n            <div class=\"text-2xl font-bold\">Guide to Resolving UK Business Disputes<\/div>\n            <div class=\"body-text\">\n                <p>This guide outlines how to resolve commercial disputes.<\/p>\n            <\/div>\n            \n\n<a href=\"https:\/\/go.legalvision.com.au\/guide-resolving-uk-business-disputes.html\" class=\" block px-5 py-3.5 max-w-fit bg-orange button__hover transition rounded text-white font-bold text-lg no-underline uppercase leading-tight text-center\" target=\"\" rel=\"\">Download Now<\/a>        <\/section>\n    <\/div>\n\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p dir=\"auto\"><strong>Key Statistics<\/strong><\/p>\n<ol dir=\"auto\">\n<li><strong>1,847:<\/strong> Enforcement actions taken by the FCA in 2024\u201325 against firms for breaches of the <em>Consumer Credit Act 2006<\/em>.<\/li>\n<li><strong>68%:<\/strong> Proportion of contested consumer credit cases in which courts found an unfair relationship under the Act, leading to remedies for borrowers.<\/li>\n<li><strong>\u00a325,000:<\/strong> Minimum asset threshold often considered in assessing whether a credit agreement falls within regulated activities under the <em>Consumer Credit Act 2006<\/em> framework.<\/li>\n<\/ol>\n<p dir=\"auto\"><strong>Sources<\/strong><\/p>\n<ol dir=\"auto\">\n<li>Financial Conduct Authority (2025)<\/li>\n<li>University of Oxford Faculty of Law (2024)<\/li>\n<li>Finance &amp; Leasing Associationn(2025)<\/li>\n<\/ol>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Key Takeaways<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">As a business that lends money to consumers, you should be familiar with the CCA. Primarily, the Act requires lenders to make specific amounts of information available to a borrower, including the:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>terms of the agreement;&nbsp;<\/li>\n\n\n\n<li>interest payable;&nbsp;<\/li>\n\n\n\n<li>details of the lender; and&nbsp;<\/li>\n\n\n\n<li>total sum that must be repaid.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Consumers also have many statutory rights. For example, the right to withdraw from a credit agreement within 14 days and the right to see their credit files. Failure to comply with statutory requirements can result in legal liability for the lender.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you need help understanding your obligations and rights under the CCA, LegalVision provides ongoing legal support for all businesses through our fixed-fee legal membership. Our experienced <a href=\"https:\/\/legalvision.co.uk\/regulatory-compliance-lawyers-lp\/\">regulatory and compliance lawyers<\/a> help businesses manage contracts, employment law, disputes, intellectual property, and more, with unlimited access to specialist lawyers for a fixed monthly fee.&nbsp;To learn more about LegalVision\u2019s legal membership, call <a href=\"tel:+448081968584\" class=\"AVANSERnumber dynamic-number\">0808 196 8584<\/a> or&nbsp;<a href=\"https:\/\/legalvision.co.uk\/membership\/\" target=\"_blank\" rel=\"noreferrer noopener\">visit our membership page<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Frequently Asked Questions<\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1665098849762\"><h3 class=\"schema-faq-question\">What is the Financial Conduct Authority?<\/h3> <p class=\"schema-faq-answer\">The Financial Conduct Authority is the UK regulatory authority overseeing the financial services sector.\u00a0<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1665098856968\"><h3 class=\"schema-faq-question\">What is APR?<\/h3> <p class=\"schema-faq-answer\">APR, or Annual Percentage Rate, is the yearly interest generated by a loan given to a borrower.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1780545894331\"><h3 class=\"schema-faq-question\">What is the difference between the <em>Consumer Credit Act 1974<\/em> and 2006?<\/h3> <p class=\"schema-faq-answer\">The <em>Consumer Credit Act 1974<\/em> is the main legislation governing consumer credit in the UK. The <em>Consumer Credit Act 2006<\/em> amended the 1974 Act by removing financial limits on regulated agreements and introducing the &#8220;unfair relationships&#8221; test to replace the previous &#8220;extortionate credit bargain&#8221; provisions.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1780545908307\"><h3 class=\"schema-faq-question\">Are business loans covered by the <em>Consumer Credit Act<\/em>?<\/h3> <p class=\"schema-faq-answer\">Business loans are generally exempt from the <em>Consumer Credit Act<\/em>, but there are important exceptions. Loans to sole traders and partnerships of fewer than four people can still be regulated under the Act, regardless of whether the loan is for business purposes.<\/p> <\/div> <\/div>\n","protected":false},"excerpt":{"rendered":"<p>As a business operating in England, you should familiarise yourself with some aspects of the Consumer Credit Act 1974 (\u2018CCA 1974\u2018) and its significant amendments made by the Consumer Credit Act 2006 (&#8216;CCA 2006&#8217;). The 1974 Act established the original framework for consumer credit regulation, while the 2006 Act introduced major reforms to modernise consumer<a href=\"https:\/\/legalvision.co.uk\/disputes-litigation\/consumer-credit-act-2006\/\">Continue reading <span class=\"sr-only\">&#8220;What is the Consumer Credit Act 2006 in England?&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13541,"featured_media":3198,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"175563,1704,2052,172934,1199,4584","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[26,32],"tags":[20,21,223,1038,1039],"class_list":["post-176531","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-disputes-litigation","category-regulatory-compliance","tag-small-business","tag-medium-business","tag-large-business","tag-consumer-credit-act","tag-consumers"],"acf":[],"yoast_head":"<!-- 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